Research On The Shareholder Representative Litigation

With the gradual development of China’s corporate system, scholars have started todiscuss the Shareholder Representative Litigation under the influences of theCompany Law Reform overseas from the1990s. As for the Company Law onprotection of minority shareholders is inadequate, China established ShareholderRepresentative Litigation in the Newly-amended Company Law in2005. Though theShareholder Representative Litigation is established, there still no clear rules on thedetails of this system in practice, such as the legal status of the company in litigation,the definition of “emergency situations”，can the pre-procedure be exempted undersome specific circumstances.Whether the Shareholder Representative Litigation played the role we expected?What should be done next to improve this system? This article has collected some ofthe Shareholder Representative Litigation cases since the implementation of the newlycompany law in China. With case analysis, this article try to find the problemsencountered in judicial practice of Shareholder Representative Litigation, and putforward some suggestions to this legislation. This article contains five parts.The first part is about the basic introduction of the Shareholder RepresentativeLitigation, contains the conception, different characteristics from the general civillitigation, and the function of this litigation system.The second part is about the establishing background of the ShareholderRepresentative Legislative in China, and the current status of its implementation byanalyzing the scope of the proceedings, the procedures, and the fact-finding.The third part is about the specific aspects of the Shareholder RepresentativeLitigation in China with case analysis. It is mainly about the qualifications of litigants,the status of the company and other shareholders in stockholder derivative action,several situations in pre-procedure, responsibilities for shareholders to bear after thejudgment.The forth part is about the introduction of Shareholder Representative Litigationoverseas, especially in the United States and Japan, attempts to provide ideas for its improvement in China.The fifth part is to give specific suggestions in solving the problems encountered injudicial practice. This part points out that, to improve the Shareholder RepresentativeLitigation, scholars should pay attention to the balance between encouraging theproper suits and preventing speculative behavior.